by Jenny Donelan
The numerous mergers, acquisitions, and spinoffs among LCD companies over the past few months raise the question of what it all means for businesses that have relationships with these companies. Certainly, LCD makers have been facing challenges of late. Despite the continued market dominance of LCD technology, profits have been harder to realize for several reasons, including the necessity of lowering prices in order to remain competitive and of investing in new processes and new fabrication plants to meet market demand for ever-larger panels. While all this is happening, alternative display technologies such as OLEDs and e-Paper seem to be gaining traction, at least in the consumer space.
New technologies and mergers make it possible for LCD makers to turn out less-expensive products, but this is not always good news for OEMs and other companies that depend on a steady supply of identical LCD panels for their medical, industrial, and military customers. Customers in these markets have specific demands for products, which often include life cycles as long as 5–7 years.
Information Display recently spoke with Joe Fijak, Vice President for Display Solutions at Avnet Embedded, about the recent changes. Avnet Embedded, a division of Avnet, Inc., is a global electronic products and services provider and integrator that works with numerous OEMs. "There have been challenges," says Fijak, "but also some very positive changes." A certain amount of adjustment was inevitable, considering market conditions, he explains, but companies are doing what they need to do to remain competitive and to be able to continue to invest. He notes that LCDs still represent the majority of business in the vertical markets that the Avnet Display Solutions Group serves. And in those markets, customization, including optical-bonding requirements, high-brightness enhancements, touch integration, and digital signage, has been a huge growth area.
All the recent changes can be difficult to track; therefore, the following list highlights by countries some of the involved companies and what the proposed impact, if any, may be for the industrial market.
NLT (formerly NEC LCD Technologies) manufactures industrial LCD modules. The company was formed in July 2011 as a joint venture between NEC and Shenzhen AVIC Optoelectronics, Ltd. Renesas Electronics America in Santa Clara, CA, is the exclusive representative of NLT products in North America. In January of 2012, AVIC Optoelectronics announced changes to the North American sales structure of another of its holdings, Chinese company Tianma Microelectronics (USA), Inc. As of April 2012, all distribution sales of Tianma products have been supported by the NLT/Renesas structure. An important part of NLT's strategy going forward, notes Fijak, is to continue to promote its TCO (Total Cost of Ownership) model to those companies seeking high-end long-lasting products.
In late 2011, Sony, Hitachi, and Toshiba agreed to merge their businesses in conjunction with the Innovation Network Corporation of Japan (INCJ). INCJ, which was formed in 2009 as a temporary entity to promote the competitiveness of Japanese firms, is now the largest shareholder of Japan Display, Inc. (JDI), a manufacturer of small- and medium-sized TFT modules, with a 70% stake in exchange for a $2.6 billion investment. That leaves Hitachi, Sony, and Toshiba with a 10% share each. Of particular interest to the industrial market, says Fijak, is that JDI has elected to support a number of selected panels from Toshiba's industrial product lineup.
Panasonic announced (in a separate deal) that it has agreed to sell its LCD factory in Mobara, Japan, to Japan Display, Inc. This factory builds large-format and TV panels.
The Japan Display Industry business merger resulted in the formation of a subsidiary named Kaohsiung Opto-Electronics (KOA). KOE Americas replaces Hitachi Electronic Devices (USA), Inc., for LCD sales and will sell passive-STN and color TFT displays from 3.5 to 21.3 in.
Sharp Microelectronics America is a Japan-based manufacturer of traditional industrial-sized small, medium, and large (up to 80 in.) panels for industrial signage applications. According to Fijak, Sharp has recently been aggressively redesigning most of its industrial TFT modules from CCFL backlights to LED backlights. In March 2012, Sharp announced that Taiwan-based electronics manufacturer Hon Hai Precision Industry Co. was buying a 10% share of Sharp Corp. Hon Hai, owner of the Foxconn factories in China, is a key producer of iPads and iPhones for Apple. Hon Hai also bought a 46.5% share of Sharp's Gen 10 facility in Sakai, Japan. Sony Corp. will retain a 7% share of that plant, and Sharp's share will drop from 93% to 46.5%. Says Fijak, "No changes in supply to North America or any significant changes to pricing structures or lead times are expected as a result of this event."
Kyocera Display America, based in Japan, is a recently formed corporation made up of the former Kyocera Electronics America LCD Division and newly purchased LCD manufacturer Optrex. Kyocera Display America continues to make panels in industrial sizes as well as monochrome displays for instrumentation. Fijak notes that the company will be introducing about a dozen industrial/medical panels with LED backlighting at Display Week 2012. Kyocera makes panels that range from 5.7 to 15 in. and is particularly strong in the 5.7-in. range and in high-brightness offerings. In addition, Kyocera Display America can continue to support the Mitsubishi products formerly available through Optrex (2.0–19.2-in. panels). Seiko Instruments, once a maker of small- and mid-sized panels, exited the LCD market last year.
Tianma Microelectronics (mentioned above) is the largest LCD manufacturer in China. It currently has a Gen 5 fabrication plant and will be opening a state-of-the-art Gen 5.5 plant in late 2012.
LG Displays (formerly LG Philips) is a Korean-based manufacturer of LCD panels. LG Displays is the manufacturing arm for LCD modules, whereas LG Electronics builds the panels into TVs, industrial monitors, and mobility products for the consumer industry. LG Displays is strong in TVs, notebooks, cellphones, and tablets. The company is recommitting to industrial displays, according to Fijak, and is now offering 3-year life cycles.
Products that Samsung supports within the industrial market are 3.5–8-in. mobile displays, 18.5–27-in. monitor displays, and large-format (22–82-in.) panels for digital-signage applications. The company's highly successful LCD business was recently spun off fromSamsung Electronics into a new entity, Samsung Display Company. For more about the new company, see "Samsung Announces LCD 'Spin-off' " in the April 2012 issue of Information Display.
Korean TFT-LCD manufacturer Hydis Technologies was acquired by e-paper developer E Ink in 2007. Hydis has several unique panels that support the industrial market.
AU Optronics' strength is in TFT-LCD panels for the commercial market, says Fijak. It does not make TVs but does make panels for TVs. "Recently, they have made significant strides in the industrial market, with a wide range of LED backlit products, including several projected-capacitive touch (all developed in house) and high-brightness options," says Fijak. AUO is also now offering 3-year minimum life cycles for its products, with a range from industrial sizes (4.3–24 in.) to large-format (26–65 in.) industrial panels for digital signage.
Taiwanese company Prime View International, a small- and medium-sized display maker, acquired e-paper developer E Ink in 2009 and became E Ink Holdings in 2010. Prime View offers a variety of industrial panels with 3-year life support.
Chimei-Innolux is Taiwan's largest LCD maker. In December 2010, Chimei-Innolux announced it would be partnering with Foxconnto bring its displays to the Chinese market. Chimei makes a modest number of panels for the industrial market.
Fijak, who has 30 years in the electronics business, (20 in the display and embedded industries), says he has seen turbulent times with positive outcomes before. In this current market, he believes the need for customization and long life cycles will keep many customers doing a brisk business. In fact, in the near future, Avnet will increase its internal capabilities to deepen the level of touch integration, high brightness, and other value-added services it now provides. The company plans to expand to a Class-10,000 clean room facility that measures upwards of 4000 sq. ft.
"Some 80% of customers are looking for value added to the panel, whether it be film lamination, high brightness, touch integration, or other customization," he says, adding that "One of the things we see happening more and more is the marriage between LCDs and single-board computers." Other features of importance to customers that many companies are now offering include 50,000–100,000 hour specs (to half-brightness), wider temperature specs, wider viewing angles and aspect ratios, "greener" components and performance, and higher resolutions. Many of these features are being optimized through the use of LED backlighting. "LCDs with LEDs [backlighting], and also with touch, is still by far the dominant request that we see," says Fijak. •